ASIC confirms s923A restrictions

In a statement, ASIC announced it has updated its regulatory guidance to include restrictions on the use of terms implying independence, which were first outlined in June 2017.

Under the new guidance, the use of the terms ‘independently owned’, ‘non-aligned’ and ‘non-institutionally owned’ will be restricted under the Corporations Act.

“We want to ensure that those providing financial services to consumers are accurately describing their services,” said ASIC deputy chair Peter Kell.

“Consumers should not be misled into thinking a person is free from conflicts of interest solely because they use terms such as ‘independently-owned’.”

The regulator noted that the six-month “facilitative compliance period” for those using these terms but don’t meet the new standards will end on 31 December this year.

The confirmation of the changes comes despite lobbying efforts from various sectors of the industry, including the AIOFP, and Minister for Revenue and Financial Service Kelly O’Dwyer telling ifa the government is “open to listening to industry” on the issue.

Brett Walker of SMART Compliance previously told ifa that advisers who do not meet the definition of independence may be able to use alternative phrases, such as “able to select financial products and strategies without being told what to do by a product issuer”, but added these too may be restricted in the future.